BLOOMINGTON — State Farm has received nearly 300,000 catastrophe claims already from a two-month barrage of severe storms and tornadoes, with payouts in the hundreds of millions of dollars and expected to rise.
The bulk of the tally — about 284,000 property and auto claims — comes from multiple storm systems that tore across the country in April, including a tornado outbreak that killed hundreds of people in the southern U.S. Two weeks ago, when only 133,000 claims were filed in those storms, State Farm had already paid out $215 million.
An updated payout amount was not available Thursday.
State Farm has about 4,300 catastrophe claim representatives, independent adjusters and extra call center employees — in addition to its agent staffers — deployed currently, said spokesman Jeff McCollum.
“This has been a very heavy spring in terms of (catastrophe) claims,” he said.
This week’s storms and tornadoes in Texas, Oklahoma and Joplin, Mo., have led to 11,100 new catastrophe claims so far. That’s expected to rise, and payout amounts are not yet available. (Damage caused by the same storm system in Arkansas and Kansas has not reached State Farm’s “catastrophe” level, so data is not available.)
State Farm averages about 800,000 catastrophe claims annually, with payouts averaging $3.8 billion. A bad year for storms can lead to a bad earnings year for State Farm, the largest home and auto insurer in the U.S.
In 2008, when State Farm saw more than 1 million catastrophe claims, those losses totaled an unusually high $6.3 billion. That was on par with 2005, when hurricanes Katrina, Rita and Wilma wreaked havoc. State Farm’s net operating loss in 2008, which was also a poor year for its stock portfolio, was $542 million.
The spring storms come as State Farm pursues a number of cost-cutting moves companywide, from consolidating field offices to leveling off property taxes and scaling back retiree insurance contributions.
But McCollum said a heavy year for catastrophes would not increase the need to find efficiencies.
“State Farm has always sought to be a good steward of its customers’ premium dollars. Current efficiency reviews are part of a continuing process aimed at providing our customers the best service at the best price.
“This is our primary mission,” McCollum said of the spring storms. “As the nation’s largest home insurer, we maintain capital strength to respond to such events.”
Tornadoes and other severe storms caused $30 billion in insured losses in the U.S. in 2008-2010, according to the Insurance Information Institute. “The spring of 2011’s tornadoes have been some of the costliest, and deadliest, in U.S. history,” III President Robert Hartwig said earlier this week.
Catastrophe modeling firms have pegged the April tornado outbreak’s insured losses at between $5 billion and $6 billion. On Tuesday, one of those firms, Eqecat, said Joplin’s losses alone could be another $3 billion.
Country Financial, a smaller Bloomington-based insurer, has received almost 4,600 property and auto claims from tornadoes in Alabama on April 27, paying out about $37 million, said spokeswoman Chris Anderson. Four separate April storm systems in Illinois also led to about $35 million in payouts on 9,580 claims.
“We have been doing yeoman’s work in trying to get our clients whole again after these storms,” she said, noting the first-ever deployment of a Country mobile claims center to work with Alabama policyholders.
Reporter Ryan Denham can be reached at twitter.com/ryanpantagraph